Lansner: California's thriving job market is no longer in a recovery

“The recovery is not a recovery. At this point in the economic cycle, we are in an expansionary phase,” said economist Mark Schniepp of the California Report.

California’s business climate may be popular to mock, but the economy isn’t listening and is back on its feet. This is a real surge that’s putting people to work and cutting unemployment rolls.

Friday’s jobs report shows job growth remains swift and unemployment rates are back down to levels last seen as the financial storm battered the regional, national – and global – economies.

Statewide, bosses added 340,200 in the year, or 2.3 percent. The state trailed only Texas (348,000 new jobs) for the month’s largest hiring spree nationwide. It was the 26th consecutive month of 2 percent-plus job growth. That leaves overall California payrolls just 25,000 positions – 0.2 percent – below the 2007 jobs peak. And private sector jobs are at an all-time high.

New jobs slimmed California’s notoriously lofty unemployment levels, which are calculated from a survey of households. Joblessness fell to 7.8 percent vs. 8.1 percent in March, and 9.1 percent a year ago. It’s the lowest statewide unemployment rate since August 2008.

Orange County bosses have kept pace, hiring a net 26,900 workers in a year – 1.9 percent growth. Orange County’s unemployment rate fell to 5 percent vs. 5.8 percent in March, and 5.9 percent a year ago. It’s the lowest unemployment rate since May 2008.

And hiring is common in Los Angeles County too, where employers added 91,300 workers in the year ending in April – a 2.2 percent growth pace. Unemployment fell to 7.6 percent in April vs. 8.7 percent in March, and 9.4 percent a year ago. It’s the lowest level of joblessness in the county since June 2008.

Schniepp was one of the few major economists to make an early call on the California rebound. To him, the state’s huge collection of pluses – from innovation leader to sheer size and natural beauty – were going to outweigh the oft-mentioned negatives of high taxes and heavy regulation. But the expansion has surprised even him.

“The employment numbers have been very impressive recently,” Schniepp says. “Rates of unemployment are falling, and the fastest pace of job creation is occurring now.”

Argue all you want about California’s business climate and whether it is correctly structured for as many industries and workers as possible. The revival’s impact suggests California has lasting appeal to employers. California industries such as professional and business services, education, health services, and leisure and hospitality hit record employment levels in April.

To be picky, California job growth rates have been moderating this year from what we now know, after significant upward revisions, was a hotter than what-was-then-known rebound in 2012-13. Are the cooler recent patters a sign of pending woes or simply a natural cooldown?

Economist Schniepp isn’t worried.

“Remember that the difference between 2012 and 2013 was more of a bounce back. Now that we are back, we are likely to be creating jobs at a more measured pace.”

That “measured pace” isn’t a negative to Schniepp, who guesses that when the books are closed on hiring tabulations for this year and next, “2014 and 2015 may be the two best years of the current expansion. We don't see many obstructions and the risks to the forecast are mainly to the upside, like a faster rate of recovery in Europe, and faster rates of growth in China.”

To best see California back at work, please ignore naysayers and the pontificators with political or self-serving bents. Ponder the ongoing upswing, then remember where the state’s economy was five or so years ago – getting clobbered by a near collapse of the world’s financial system.

First, California survived. Now, in general, the economy thrives.

“The future right now looks bright for the economy,” Schniepp says. “Think about it: Zero interest rates. Mortgage rates in the low” 4 percent range. “Unemployment dropping. Jobs across nearly all industries, rising. Inflation contained. Export values from California ports at record levels. The stock market at all-time highs. Relative peace in the world. Oil prices stable. What more could you ask for from 2014?”

He then added: “Well, maybe some rain ... but with rain, 2015 might actually be an even better year!”

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